SEC and FINRA compliance and regulatory training – Ongoing compliance training is viewed by the regulators as an essential component of a robust compliance program. Training supports a “tone-at-the-top” attitude that regulators like to see and can go a long way to demonstrate a firm is serious about their compliance program. If firm staff can demonstrate a good understanding of the firm’s compliance program, regulatory audits are more likely to progress smoothly. If during an SEC audit, examiners believe the firm has a solid compliance program they are more apt to not “dig deeper”. If on the other hand, examiners develop an impression that a firm has weak overall compliance, they are much more likely to request additional information and seek further clarification regarding the firms system of controls.
The current regulatory environment is dependent on SEC examination staff interpretations and that is why it is so important to alleviate an examiner’s concerns at the start of an examination. The SEC is evolving into a “zero tolerance” regulator. The need for industry participants to ensure they are current with their understanding of the regulations is paramount to surviving an SEC exam.
SEC3 provides customized training to various registrants within the financial services industry. In each instance we design training modules with the goal of delivering efficient high-impact sessions. We ensure content is delivered in such a way as to be appropriate to each group’s operational functionality. We can provide training through various means including in-person sessions, by teleconference and through online webinars. Each training module can be solely instructor lead or interactive where each participant has the ability to ask questions. We have provided hour long training sessions led by one instructor and we have provided multi-day training led by a group of instructors.
SEC3 most requested training program by advisers and broker dealers focuses on how to prepare for an SEC examination. In addition, we provide specific training in the following areas.
Adviser Training:
A firm’s compliance department is responsible for ensuring firm-wide adherence to internal and regulator mandated policies and procedures. However, within an adviser, different functional areas exist where staff should have deeper knowledge of the regulations related to their functional areas. For example, the marketing department should have a greater understanding of the regulations concerning communication with clients. They should know the details of the various applicable no-action letters. Portfolio Managers on the other hand, should clearly understand the rules surrounding trade allocation and their fiduciary duty. SEC3 brings the expertise needed to provide all functional areas in-depth training modules. We customize each module addressing the applicable rules and regulations and deliver the training within the context of the firm’s written policies and procedures.
Director Training:
Whether working with mutual funds, private funds or advisers, directors assume personal liability for the oversight function they perform. Directors must remain abreast of the current regulatory environment and must interpret new rules as they are proposed and understand the responsibility imposed on them in their role. SEC3 can provide focused comprehensive or high-level interactive preparation for directors. Our services augment the direction usually obtained from counsel and we are able to provide relevant and detailed information from a regulators perspective.
Mutual Fund Portfolio Compliance Training:
Portfolio Managers and traders need to understand the specific restrictions applicable to the mutual funds they manage and for which they trade. Compliance with the Investment Company Act of 1940 and specific mutual fund guidelines is dependent upon a deep understanding of the regulations and the nuances and interpretations that accompany the written rules and restrictions. Mutual funds have additional rules and regulations compared to other institutional accounts. SEC3 trains portfolio management staff by reviewing the actual procedures within the adviser and administrator to help ensure all parties are operating with a same understanding so that no risk remains without a corresponding control and review process.
Broker Dealer Training:
Broker Dealers operate in a regulatory environment where they have to answer to both FINRA and the SEC. This oversight by both regulators coupled with the diverse business models operated by broker dealers can complicate a BD’s compliance program. Having numerous branch offices can further complicate administering the program. All this creates an additional level of difficulty with ensuring the Firm Element is properly developed and administered. All covered persons are required to be knowledgeable of the firm’s compliance program. SEC3’s professionals can assist with the required Firm Element training as well as with developing customized training modules designed for the different functional areas within a brokerage firm.
